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As recently as last week, Google Inc. was generally known as the nation's largest and most vocal advocate of Net neutrality  the principle that any bit of data online should be allowed to travel just as fast as any other bit, allowing the high school kid in his bedroom to compete on the same viral playing field as a multinational corporation with a server farm.

But that was then, before Google's announcement Monday of a controversial policy proposal with Verizon that would allow for Internet service providers to prioritize data traffic delivered through mobile devices and new premium broadband subscription services. In a conference call to explain the proposal, Google president Eric Schmidt argued that there was no change in company policy. "Google cares a lot about the open Internet," he said, adding that the company was focused on protecting the rights of the next "two people in a garage" with an online business start-up.
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But many of Google's former allies in the Net-neutrality policy battle say Google's description of its proposal did not tell the full story. "It's the next Google in a garage in Palo Alto that will be hurt by this," says Susan Crawford, a former White House technology adviser who now teaches at Cardozo School of Law. "This allows for the cable-ization of an Internet access provider."

By cable-ization, Crawford is referring to the holy grail for current wireless phone and broadband providers, who are seeking new ways to raise revenues from the Internet access they control. Currently, broadband and mobile companies sell access to the entire Internet for a flat fee, and do not share in any revenues for the content that flows over their pipes. In the future, these same companies would like to offer premium services  new, faster, specialized information superhighways  that would allow them to charge subscription rates, in much the same way that cable providers now do for channels like HBO and ESPN.
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Under the Google-Verizon proposal, which will be reviewed by lawmakers over the coming months, the existing public landline Internet would be protected from any prioritization of content. But companies that own data lines could also provide, according to the Google-Verizon announcement, "additional online services" over broadband wires that "could include traffic prioritization." In other words, you could still watch YouTube videos online at current speeds, but other video products  first-run movies, for instance, or live sporting events  could become available at even faster speeds for a fee.

Furthermore, under the Google-Verizon plan, there would be no limits on wireless data providers who wanted to prioritize data. That means, for example, that if Wireless Phone Company X struck a deal with the National Football League but not Major League Baseball, it would be able to provide streaming footage of football games to iPhones or BlackBerrys at higher speeds than those of baseball footage. The hypothetical "two people in a garage" with a start-up who wanted you to see their videos would be encouraged to cut a deal with the wireless company to gain higher-speed access to customers.
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The Open Internet Coalition, a group of Net-neutrality boosters that counts Google as a member, released a statement Monday night objecting to this part of the Google proposal. "We welcome all efforts to promote openness on the wireline Internet," the statement read, "but believe that any satisfactory agreement must also include protection for wireless Internet users to access websites and applications of their choice."

Other Net-neutrality advocates were quick to criticize the Google proposal. "Unlike the future Googles, the present Google can afford prioritization service that will block out competitors," said Andrew Schwartzman, the policy director of the Media Access Project, who opposes the Google-Verizon proposal. "It locks in the incumbent's advantage."
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In the conference call, Google CEO Schmidt minimized the import of the prioritization that would be allowed under the proposal, saying Google would continue to distribute all of its content over the existing Internet, not any premium subscription service. "We actually like the public Internet and we intend to use it," he said. "And we'll use it the way we've described on this open principle." On the same call, Verizon CEO Ivan Seidenberg said that any prioritized Internet service would not take away from the already existing capabilities of the current public Internet. "As we add additional capabilities, we would make sure that we built enough to satisfy both," he said.

The Google-Verizon proposal, in the form of a two-page white paper, will now circulate on Capitol Hill, where telecommunications companies that want to offer premium online content hold significant sway, in part because of millions of dollars in campaign donations. No congressional action is expected until 2011, at the earliest. At the same time, the Federal Communications Commission is considering a rulemaking process that would seek to regulate Internet access as a telecommunications service, a move that could restrict companies from prioritizing their content.

In the end, the new Google-Verizon proposal leaves as an open question the future shape of online consumption, especially for video. Something important has changed, however: one of the largest players in the discussion, Google, has demonstrated a new willingness to compromise on just what it means to have an open Internet.